Feb 4, 2017

Will digital transformation save the telco industry?

Over the past few weeks, McKinsey [1] and the World Economic Forum (WEF) [2] have weighed in on the debate about long term growth prospects in the telecommunications sector. They have valid concerns which arise from projections for low revenue growth and shrinking margins for telecommunications service providers. The near term prospects for many telcos involves the sale ever increasing volumes of data and cloud services to consumer and business customers on the assumption that price elasticity effects will work in their favor and not undermine top-line, revenue growth.

The McKinsey and WEF ideas rely on optimizing the core business and building at the periphery to support digital services and enhanced customer experiences. These approaches take a narrow view of the market for telcos and one and define competition in terms of other telco service providers. Is that really the right way to address the strategic challenge that faces the industry?